SEC Reverses Course: Approval of Grayscale's Digital Asset ETF Suspended, Impacting Bitcoin, XRP and Altcoins

The U.S. Securities and Exchange Commission (SEC) has suspended its initial approval for NYSE Arca to list shares of Grayscale Digital Large Cap Fund LLC, originally scheduled for July 1, 2025. In a surprising reversal, the regulatory body has halted the previously approved fund listing that would have tracked multiple digital assets.

The SEC had initially granted approval on July 1 through an expedited process under the delegated authority of its Trading and Markets Office, following NYSE Arca's amendment to Rule 8500-E. However, in accordance with 17 CFR 201.431, the Commission has now elected to review this decision, putting the entire listing process on hold.

Grayscale's proposed fund would have tracked a basket of digital assets composed of approximately 80% Bitcoin (BTC), 11% Ethereum (ETH), along with smaller allocations to Solana (SOL), Cardano (ADA), and XRP. The SEC has notified NYSE Arca and relevant parties that it will provide updates as the review process progresses.

This development comes amid heightened regulatory scrutiny of digital asset products, with the SEC maintaining its cautious approach despite increasing institutional interest in cryptocurrency investment vehicles.